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Thursday, August 31, 2006
New CBPP Paper on Min. Wage
Another sad anniversary is coming up. Tomorrow is the 9-year anniversary of the last time the minimum wage was raised. For the occassion, the Economic Policy Institute and the Center on Budget and Policy Priorities have a new paper on the minimum wage. On relative poverty:
For example, in 1978, even before the gap [between executive pay and the minimum wage]began to grow quickly, the average CEO
was still paid 78 times as much as a full-time year-round worker earning the minimum wage. By
2005, the average CEO was paid 821 times as much as a minimum wage earner; this is the widest
discrepancy on record. As an earlier report from the Economic Policy Institute observed: “An
average CEO earns more before lunchtime on the very first day of work in the year than a minimum
wage worker earns all year.”
Holy moley! The paper also make some good points about how increases in the cost of living erode the value of the minimum wage (and all other wages, btw). On absolute poverty:
Since September 1, 1997[the last time the minimum wage was raised], the overall inflation rate has increased by 26 percent. The costs of certain necessities have risen even more sharply. A gallon of gas costs more than twice as much as it did nine years ago; the cost of medical care increased by 43 percent.
These costs of living increases may be even worse for poor people on the minimum wage, who, a Brookings Institute study recently found, tend to pay more for the same products and services than better-off people do.
And the combination of stagnating wages and ever-rising costs affects more than just minimum wage workers. It's driving many higher-income Americans deep into debt.
Anyway, I digress. The whole thing is worth a read, as we gear up for the legislative battle over the minimum wage that's likely to happen this September.
Posted by Matt Lewis
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